The Managed Risk Medical Insurance Board (MRMIB), which oversees the Healthy Families program–California’s version of the State Child Health Insurance Program–today decided it would wait until at least November 5 to decide whether it should adopt emergency regulations to pave the way for creating wait-lists and disenrolling children from the program.

FEDERAL STALEMATE

MRMIB executive director Lesley Cummings had recommended the board adopt the emergency regulations in light of the fact that the State Children’s Health Insurance Program (SCHIP) expired on September 30 and Congress and President Bush are still wrangling over how to continue the program – and for how much. Bush had originally allotted $25 billion over five years – which would cause California’s program to fall into deficit by the end of our fiscal year 2008. Meanwhile, Congress has proposed a total of $60 billion over five years, and enable expansions to the program, which the President opposes.

The SCHIP legislation managed to obtain a veto-proof majority in the Senate, but failed twice in the House of Representatives – falling less than 20 votes short of 290 votes needed last week — to override Bush’s veto of the Congressional SCHIP bill.

Ronald Springarn from MRMIB said Washington insiders have reported that the Administration and Congressional leaders continue to work toward a compromise to continue the program. Sticking points continue to be whether families above 300% of poverty could be eligible for funding in states that allow it (such as New Jersey); and whether a threshold for low-income children enrolled in SCHIP would have to met before others are enrolled.

HEALTHY FAMILIES SITUATION

Director Cummings emphasized that the board action did not mean any of the 830,000 children currently enrolled would be kicked off imminently. Nor would it mean the program would institute a waiting list. Cummings said she viewed it as her job to guide the board to be financially responsible in managing the program.

“You don’t have a farthing for this program on November 17,’’ she said. Healthy Families receives $2 for every $1 state dollar put into the program. While federal dollars may not come immediately, the 07-08 state budget has appropriated $392 million from the state’s general fund for the program.

Other states have the ability to put children on waitlists or disenroll children. California, however, took that provision out of its regulations in 2001 when it sought a waiver to allow the extension of Healthy Families to parents of children in the program. The federal government, at the time, wanted to ensure that children were prioritized in enrollment before parents were covered. The waiver expired this year, and due to budget shortfalls in California reaching $38 billion, no parents were ever enrolled in Healthy Families.

Based on analysis performed by Peter Harbage, Cummings layed out the fate of potentially all children currently enrolled in Healthy Families if the President had his way and funded SCHIP with only the $5 billion increase:

Director Cummings emphasized that the board action did not mean any of the 830,000 children currently enrolled would be kicked off imminently. Nor would it mean the program would institute a waiting list. Cummings said she viewed it as her job to guide the board to be financially responsible in managing the program.

“You don’t have a farthing for this program on November 17,’’ she said. Healthy Families receives $2 for every $1 state dollar put into the program. While federal dollars may not come immediately, the 07-08 state budget has appropriated $392 million from the state’s general fund for the program.

Other states have the ability to put children on waitlists or disenroll children. California, however, took that provision out of its regulations in 2001 when it sought a waiver to allow the extension of Healthy Families to parents of children in the program. The federal government, at the time, wanted to ensure that children were prioritized in enrollment before parents were covered. The waiver expired this year, and due to budget shortfalls in California reaching $38 billion, no parents were ever enrolled in Healthy Families.

Based on analysis performed by Peter Harbage, Cummings layed out the fate of potentially all children currently enrolled in Healthy Families if the President had his way and funded SCHIP with only the $5 billion increase:* 260,000 children would need to be disenrolled immediately 11/1 (next week); OR,* 433,000 children would need to be disenrolled by 1/1/08; OR,* Healthy Families would shut down, and disenroll all 830,000 children 7/1/08.

Cummings said the sooner the state acted, the fewer children would be affected. If and when the board adopts regulations, it will take 32 days before they can act on those regulations. The proposed regulations would allow MRMIB to* Establish a waitlist;* Terminate enrollees at their annual eligibility review.

Cummings repeatedly emphasized that this did not mean the board would begin taking these actions immediately.

MRMIB Chair Cliff Allenby (the former director of the state’s Department of Social Services) said he understood the need to be fiscally responsible with the program, but hoped board members would be able to weigh the regulations in a more “leisurely’’ manner if the federal government took action that would not put California’s program in danger.

ADVOCATES OPPOSE EMERGENCY REGULATIONS

Children’s and health advocates stood to oppose the adoption of emergency regulations.

Deena Lahn of the Children’s Defense Fund and the 100% Percent Campaign said such actions should not be considered an “administrative’’ matter, but something to be vetted by the Legislature. “Healthy Families has reached a peak…To allow disenrollment sends the wrong message,’’ she said. Lahn also suggested that if insufficient federal funding is available, the state should take over full financial responsibility for the 8,000 women enrolled in the Access for Infants and Mothers program, rather than the Healthy Families program.

Beth Capell from Health Access California pointed out that the MRMIB board did not have the legal authority to establish emergency regulations based on “speculation” that the federal government may not act. Capell also noted that the regulations were not clear about how and when waiting lists and disenrollments would be unfurled, in what sequence and what would trigger the actions.

Other advocates who spoke against the emergency regulations included Community Health Councils, Inc., California Catholic Conference and the California Nurses Association.

DEFERRED ACTION UNTIL 11/5

Chairman Allenby motioned for the board to take a deliberative, but prudent process – waiting until November 5 to consider the regulations. In the meantime, he said, the board and MRMIB staff should carefully watch what Congress and the President do on SCHIP.

Just as important, he and staff said, was to ensure members of Congress – particularly the California delegation – understands that the Healthy Families program could be in financially dire straits should additional funding not come through. A congressional report optimistically said the state could continue its program until July 1, 2008, but without context that after July1, the program would shut down.

CALL TO ACTION: The fate of more than 830,000 children is at stake. Advocates need to do two things:

1) Contact your congressional representative and make sure they understand the importance of the SCHIP program to Heatlhy Families. Also make sure they understand that the state’s program runs out of federal dollars in November and state agencies are paving the way to disenroll hundreds of thousands of children.